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[council] ICANN Board resolutions from its teleconference meeting on 30 July 2014
- To: "council@xxxxxxxxxxxxxx" <council@xxxxxxxxxxxxxx>
- Subject: [council] ICANN Board resolutions from its teleconference meeting on 30 July 2014
- From: Bruce Tonkin <Bruce.Tonkin@xxxxxxxxxxxxxxxxxx>
- Date: Sat, 2 Aug 2014 23:16:43 +0000
- Accept-language: en-AU, en-US
- List-id: council@xxxxxxxxxxxxxx
- Sender: owner-council@xxxxxxxxxxxxxx
- Thread-index: Ac+upVXwGO81udOCQg2LZ8JLVSzKtg==
- Thread-topic: ICANN Board resolutions from its teleconference meeting on 30 July 2014
Hello All,
Below are the resolutions from the Board meeting held by teleconference on 30
July 2014.
The main points from the meeting are:
- appointed a new auditor - BDO USA (http://www.bdo.com/)
- approved posting some proposed bylaws revisions related to the GAC for public
comment (as an outcome of some of the ATRT1 and ATRT2 reviews)
- selected Dublin, Ireland as the location for the ICANN meeting on 18-22
October 2015
- approved posting some proposed changes to the nominating committee for public
comment
- approved updated level of Board member compensation at US $45,000 regardless
of whether chairing or participating in committees, and also approved this
level of compensation for non-voting liaisons (apart from the GAC liaison) .
Note that non-voting liaisons are treated as full Board members in all respects
except for the formal voting. Their views are taken into account in the
discussions prior to voting.
- approved payment of at-risk components of the CEO and Ombudsman salaries
- approved an extension of the CEO (Fadi Chehadé) contract until 30 June 2017,
with an updated level of compensation: (i) a base salary of a fixed amount of
US$630,000.00 per year; and (ii) an at-risk component of compensation of up to
US$270,000.00 per year based on the President and CEO's achieving the
performance goals as agreed by the Board.
Regards,
Bruce Tonkin
From: https://www.icann.org/resources/board-material/resolutions-2014-07-30-en
1. Consent Agenda:
a. Approval of Board Meeting Minutes
Resolved (2014.04.30.01), the Board approves the minutes of the 26 June 2014
Meeting of the ICANN Board.
b. Approval of audit firm for FY14 independent audit
Whereas, Article XVI of the ICANN Bylaws
(http://www.icann.org/general/bylaws.htm) requires that after the end of the
fiscal year, the books of ICANN must be audited by certified public
accountants, which shall be appointed by the Board.
Whereas, the Board Audit Committee, which is tasked with recommending the
independent auditors for selection each year, discussed the engagement of the
independent auditor for the fiscal year ending 30 June 2014, and determined
that given ICANN's growth, including its expanding global presence and level of
revenue, it was important to conduct an RFP for a new audit firm.
Whereas, staff conducted an open RFP process, received responses from several
firms and, after careful consideration and discussion with the Audit Committee,
staff and the Audit Committee recommend that the Board engage BDO USA, LLP to
serve as ICANN's new independent audit firm.
Resolved (2014.07.30.02), the Board authorizes the President and CEO, or his
designee(s), to engage BDO USA, LLP as the audit firm for the financial
statements for the fiscal year ending 30 June 2014.
c. Proposed GAC-related Bylaws revisions
Whereas, Recommendation 11 of the first Accountability and Transparency Review
Team (ATRT1), called for the formalization of a process for Board consideration
of advice from the Governmental Advisory Committee (GAC).
Whereas, the Board/GAC Recommendation Implementation Working Group was formed
to address this and other recommendations, and developed a "Process for
Consultations between the ICANN Board of Directors ("Board") and the
Governmental Advisory Committee ("GAC"), including those required pursuant to
Article XI Section 2.1.j of the ICANN Bylaws" (Process for Consultations),
which includes a requirement that 2/3 of Board members eligible to vote on an
issue approve any action in contravention of GAC advice.
Whereas, revisions to ICANN's Bylaws are required to give implement this new
voting threshold.
Resolved (2014.07.30.03), the Board approves the posting for public comment of
proposed revisions to the ICANN Bylaws to give effect to the Process for
Consultations.
d. 2015 October Meeting Venue in Europe
Whereas, ICANN intends to hold its third Public Meeting of 2015 in the Europe
region.
Whereas, staff has completed a thorough review of all proposed venues in Europe
and finds the one in Dublin, Ireland to be the most suitable.
Whereas, during its meeting on 18 July 2014 the Board Finance Committee
reviewed the financial implications of contracting with the venue identified to
hold the ICANN meeting in Dublin, Ireland, and agrees with the recommendation
from staff.
Whereas, the Board Finance Committee has recommended that the Board delegate to
the President and CEO, or his designee(s), the authority to take all actions to
hold the October 2015 ICANN Public Meeting in Dublin, Ireland, including all
necessary contracting and disbursements.
Resolved (2014.07.30.04), the Board approves Dublin, Ireland as the location of
the ICANN 2015 Public Meeting from 18-22 October 2015, and authorizes the
President and CEO, or his designee(s), to take all actions necessary to hold
the October 2015 ICANN Meeting in Dublin, Ireland.
Resolved (2014.07.30.05), that Board authorizes the President and CEO, or his
designee(s), to engage in and facilitate all necessary contracting and
disbursements for the Meeting venue of the October 2015 ICANN Public Meeting,
in an amount not to exceed [REDACTED FOR NEGOTIATION PURPOSES] and that the
Dublin Meeting be designated as the 2015 Annual Meeting.
Resolved (2014.07.30.06), specific items within this resolution shall remain
confidential for negotiation purposes pursuant to Article III, section 5.2 of
the ICANN Bylaws until the President and CEO determines that the confidential
information may be released.
e. Istanbul Office Lease
Whereas, ICANN has stated its objective to maintain a Hub Office in Istanbul,
Turkey.
Whereas, staff has identified and evaluated both the location and costs of a
suitable office facility.
Whereas, during a meeting on 18 July 2014, the Board Finance Committee (BFC)
reviewed the financial implications of the lease for a new ICANN Hub Office
facility in Istanbul, Turkey, and agrees with staff's recommendation.
Whereas, the BFC has recommended that the Board delegate to the President and
CEO, or his designee(s), the authority to take all actions to lease the new Hub
Office in Istanbul, Turkey, including all necessary contracting and
disbursements.
Resolved (2014.07.30.07), the Board delegates to the President and CEO, or his
designee(s), the authority to take all necessary actions to execute, and make
disbursements in accordance with, the lease for a new office facility in
Istanbul, Turkey in an amount not to exceed [REDACTED FOR NEGOTIATION PURPOSES].
Resolved (2014.07.30.08), specific items within this resolution shall remain
confidential for negotiation purposes pursuant to Article III, section 5.2 of
the ICANN Bylaws until the President and CEO determines that the confidential
information may be released.
2. Main Agenda:
a. Final Report of BWG-NomCom
Whereas, the Board Working Group on Nominating Committee (BWG?\NomCom) was
formed in February 2014 and charged with performing the review called for in
Recommendation 10 of the Nominating Committee Review Finalization Working
Group, addressing issues of the size and composition of the Nominating
Committee, as well as the related issues of NomCom's recruitment and selection
functions.
Whereas, in performing its work, the BWG?\NomCom considered the role of the
NomCom in ICANN, as well as issues of representation and parity among the
entities across ICANN that have members serving on the NomCom.
Whereas, the BWG?\NomCom completed a report with 15 recommendations, and
provided that report to the Structural Improvements Committee as required in
the BWG-NomCom charter.
Whereas, the SIC recommends that this report should be posted for public
comment prior to further Board of the potential adoption of the 15
recommendations.
Resolved (2014.07.30.09), that the Report of the ICANN Board Working Group on
the Nominating Committee be posted for public comment.
b. Board Member Compensation
Whereas, when ICANN instituted compensation for all of its voting Board members
for their services to ICANN, the Board committed to regularly review whether
compensating those voting Board members was reasonable, and if so, what level
of compensation is reasonable.
Whereas, ICANN is a nonprofit California public benefit corporation that is
exempt from Federal income tax under §501(a) of the Internal Revenue Code of
1986, as amended (the "Code") as an organization described in §501(c)(3) of the
Code.
Whereas, ICANN may not pay voting Board members more than Reasonable
Compensation as determined under the standards set forth in §53.4958-4(b) of
the regulations issued under §4958 of the Code (the "Regulations").
Whereas, ICANN has taken all steps necessary, and to the extent possible, to
ensure that the level of voting Board member compensation is reasonable,
including seeking advice and recommendations from an Independent Valuation
Expert.
Whereas, there are no barriers that would prohibit ICANN from offering
compensation to ICANN's non-voting Board Liaisons.
Whereas, the Compensation Committee and the Board have considered and evaluated
the public comments on this matter.
Resolved (2014.07.30.10), the Board approves: (i) the Towers Watson
Recommendation that the offer of compensation to all voting Directors be raised
to the equivalent of US$45,000.00 effective 1 August 2014, and that no change
be made to the Board Chair compensation which is US$75,000; (ii) offering
non-voting Liaisons (except the Governmental Advisory Committee Liaison)
compensation at the same level as voting Directors effective 1 August 2014; and
(iii) the proposed Bylaws revisions relating to non-voting Board Liaison
compensation.
Resolved (2014.07.30.11), all Board members should be required to complete a
new Board Compensation election form to reflect an affirmative acceptance
Resolved (2014.07.30.12), the Board will continue to consider other comments
raised in the public comment forum that are not addressed by this resolution.
c. Internet Governance Update and Follow-up from Discussion at ICANN
50
Whereas, the Internet ecosystem is being strengthened through recent global
coordination efforts towards developing principles for the use of the
multi-stakeholder model as a means for evolving Internet governance.
Whereas, on 28 September 2013, the ICANN Board authorized the CEO to, among
other things, "work with other key organizations and leaders to establish a
coalition towards the formation of a movement or initiative" ("Coalition"), in
order to address increasing concerns regarding the effectiveness of a "global,
open, multi-stakeholder Internet governance system."
Whereas, the Board considered that without strengthening a global, coherent
approach to Internet governance, ongoing and emerging issues will not be
properly addressed in a collective, collaborative way, which may inadvertently
affect the operational unity of the Internet, consistent with ICANN's mandate.
Whereas, on 28 September 2013, the Board further resolved that "… should the
CEO recommend an additional longer term strategy based on Coalition results,
the CEO shall present such a plan of action, including any additional financial
resources required, for further consideration by the Board."
Whereas, on 17 November 2013, the ICANN Board directed the CEO to continue
supporting the emerging initiatives on multistakeholder internet governance,
and recognized ICANN as one of the many participants supporting these
initiatives.
Whereas, on 23-24 April 2014, the NetMundial meeting convened in Sao Paolo,
Brazil, as a Global Multistakeholder Meeting on the Future of Internet
Governance, to begin the establishment of Internet Governance Principles and
the Roadmap for the future evolution of the Internet Governance Ecosystem.
Whereas, the Board congratulates the conveners and supporters of the NetMundial
meeting, including the Government of Brazil, the Brazilian Internet Steering
Committee (CGI.br), the World Economic Forum, and others ?C including
participants from across all sectors ?C in a successful meeting that resulted
in the consensus-based NetMundial Principles to guide further coordination work.
Whereas, in May 2014, the Panel on Global Internet Cooperation and Governance
Mechanisms issued its report with recommendations for an evolving Internet
Governance framework.
Whereas, the CEO has executed the mandate of the Board's 28 September 2013 and
17 November 2013 resolutions in enabling each of these above-referenced
efforts, the outcomes of which are enhancing the Internet ecosystem and
facilitating positive changes in Internet governance, while upholding the
multi-stakeholder model.
Whereas, the Board continues to monitor the progress of each of these
initiatives, and recognizes that continued work is necessary to continue with
the work on the evolution of global multi-stakeholder participation in Internet
governance.
Whereas, ICANN is participating in these initiatives in furtherance of ICANN's
mission and anticipates continued participation in these endeavors well into
the future.
Resolved (2014.07.30.13), the Board hereby directs the CEO to continue to
support the emerging initiatives, relating to addressing the outcomes of the
NETMundial meeting and the NETMundial Principles, as well as the
recommendations of the Panel on Global Internet Cooperation and Governance
Mechanisms.
Resolved (2014.07.30.14), the Board highly encourages all parties interested in
the Internet ecosystem and Internet governance to continue participation in
these emerging initiatives and notes the importance of active and committed
participation by all stakeholders.
3. Confidential Session (Main Agenda Continued):
a. President and CEO FY14 T3 At-Risk Compensation
Whereas, each Board member has confirmed that he/she does not have a conflict
of interest with respect to establishing the amount of payment for the
President and CEO's FY14 T3 at-risk compensation payment.
Whereas, the Compensation Committee recommended that the Board approve payment
to the President and CEO for his FY14 T3 at-risk compensation.
Resolved (2014.07.30.15), the Board hereby approves a payment to the President
and CEO for his FY14 T3 at-risk compensation component.
Resolved (2014.07.30.16), specific items within this resolution shall remain
confidential as an "action relating to personnel or employment matters",
pursuant to Article III, section 5.2 of the ICANN Bylaws.
b. Ombudsman FY14 At-Risk Compensation
Whereas, the Compensation Committee recommended that the Board approve payment
to the Ombudsman of his FY14 at-risk compensation.
Resolved (2014.07.30.17), the Board hereby approves a payment to the Ombudsman
of his FY14 at-risk compensation component.
c. Discussion of CEO Compensation and Contract
Whereas, under its Charter, the Compensation Committee is charged with
recommending to the full Board the appropriate elements of individual
compensation arrangements (base salary, at-risk component, and benefits) for
Officers of ICANN, and in particular the President and Chief Executive Officer
("CEO").
Whereas, on 14 July 2014, the Compensation Committee recommend that the Board
extend Fadi Chehadé's Employment Agreement as ICANN's President and CEO through
30 June 2017.
Whereas, on 14 July 2014, the Compensation Committee further recommended that
ICANN increase Mr. Chehadé's annual compensation to the following: (i) annual
base salary of US$630,000.00; and (ii) at-risk compensation component of up to
US$270,000.00 per year based on the President and CEO's achievement of the
established performance goals, to be paid out on a semi-annual basis. No
changes to the President and CEO's benefits package are recommended.
Whereas, as a not-for-profit California public benefit corporation that is
exempt from Federal income taxes because it is an organization described in §
501(c)(3) of the Internal Revenue Code of 1986, as amended, ICANN may not pay
more than "reasonable compensation" for services rendered to ICANN.
Whereas, under its Charter, the Compensation Committee is required to obtain,
review, and consider comparable compensation data for officer-level positions,
like the President and CEO, taking into account size, geographic
considerations, international presence, complexity and other relevant factors.
Whereas, under its Charter, the Compensation Committee is authorized to engage
and to seek advice from independent professionals with appropriate expertise in
compensation arrangements for U.S.-based, not for profit, tax-exempt
organizations possessing a global employee base.
Whereas, in connection with its evaluation of a potential increase in the Mr.
Chehadé's compensation package, the Compensation Committee exercised its
authority and directed staff to engage the services of Towers Watson, an
international expert compensation firm, to assist the Compensation Committee in
compiling and analyzing appropriate data as to comparability with respect to
compensation for the President and CEO position for ICANN.
Whereas, the Compensation Committee also directed staff to engage a second
international expert compensation firm for confirmation of the comparable data;
this second firm's recommendations were consistent with those of Towers Watson.
Whereas, in reviewing the terms and conditions of the compensation to be paid
to the Mr. Chehadé as ICANN's President and CEO, the Compensation Committee
followed the process set forth in U.S. Treasury Regulation § 53.4958-6, which
was intended by the Compensation Committee to enable the Board to establish the
presumption that the compensation to be paid to the ICANN President and CEO is
reasonable compensation for Federal income tax purposes.
Whereas, upon due inquiry of its members, the Compensation Committee concluded
that no member of the Committee had a conflict of interest with respect to the
increases recommended for Board approval to Mr. Chehadé's compensation package
as ICANN's President and CEO.
Whereas, the Compensation Committee has reported its activities to the Board.
Whereas, the Compensation Committee has shared with the Board the Towers Watson
comparability materials, including the recommendation and advice received from
Towers Watson, and, has been available to answer questions from the Board
regarding the compensation recommended for Mr. Chehadé as ICANN's President and
CEO.
Whereas, under ICANN's Articles of Incorporation and California law, the Board
is the authorized body of ICANN vested with the authority to determine, among
other things, the compensation to be paid to Mr. Chehadé as ICANN's President
and CEO.
Whereas, upon due inquiry of its members, the Board has concluded that no
member of the Board has a conflict of interest with respect to the compensation
arrangement recommended by the Compensation Committee for Mr. Chehadé as
ICANN's President and CEO.
Whereas, the Board has considered the comparability data provided by the Towers
Watson, and the advice and counsel of Towers Watson.
Whereas, the Board has discussed Mr. Chehadé's performance and the terms and
conditions of his continued employment, including the compensation package for
Mr. Chehadé as ICANN's President and CEO.
Whereas, in reviewing the recommendations of the Compensation Committee
regarding the compensation to be paid to Mr. Chehadé as ICANN's President and
CEO, the Board has followed the process set forth in Treasury Regulation §
53.4958-6, which is intended by the Board to enable the Board to establish the
presumption that the compensation to be paid to the President and CEO is
reasonable compensation for Federal income tax purposes.
Whereas, after consideration of all the relevant facts and circumstances, the
Board has concluded that Compensation Committee's of compensation to be paid to
Mr. Chehadé as President and CEO, effective 1 July 2014, is in its entirety
reasonable compensation for the services to be rendered by Mr. Chehadé as
ICANN's President and CEO.
Whereas, based upon the foregoing, the Board has concluded that it is in the
best interests of ICANN to extend Mr. Chehadé's Employment Agreement as ICANN's
President and CEO through 30 June 2017, and to pay Mr. Chehadé the compensation
described below, beginning on 1 July 2014.
Resolved (2014.07.30.18):
a. It is in the best interests of ICANN to extend Fadi Chehadé's Employment
Agreement to serve as President and CEO of ICANN through 30 June 2017.
b. It is in the best interests of ICANN to increase Fadi Chehadé's
compensation as ICANN's President and CEO, effective 1 July 2014, as follows:
(i) a base salary of a fixed amount of US$630,000.00 per year; and (ii) an
at-risk component of compensation of up to US$270,000.00 per year based on the
President and CEO's achieving the performance goals as agreed by the Board.
c. The extension of Fadi Chehadé's Employment Agreement as ICANN's President
and CEO through 30 June 2017, and the increased compensation as referenced
above, shall be evidenced by an appropriate amendment to the Agreement already
in place between ICANN and Mr. Chehadé, which per Amendment No. 1, was
effective 14 September 2012.
d. ICANN's Chairman and its General Counsel are authorized to finalize the
Amendment to Fadi Chehadé's Employment Agreement as ICANN's President and CEO
based on the general terms set forth above.
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